Naturally Splendid Enterprises Ltd has announced its unaudited financial results for the six months ended June 30, 2022, and unveiled a strategic update.
"We are continuing to implement our plan focused on our plant-based opportunities, most notably Plantein Plant-Based Foods,” said Naturally Splendid CFO George Ragogna in a statement.
“With most Covid restrictions now removed, we have been able to meet clients face to face at several trade shows after a multi-year hiatus, to promote the launch of our Plantein retail line while developing national distribution and sales relationships," he added.
READ: Naturally Splendid Enterprises says it will continue to focus on higher-margin products and new commercial opportunities
"Responses from the trade shows have been overwhelmingly positive, resulting in multiple new accounts as well as building the foundation for many new business opportunities. The plant-based market is maturing, and consumers are demanding higher quality products, most notably beginning with taste. Feedback from these recent tradeshows has confirmed we have amongst the best tasting plant-based products available in the Canadian market, and demand for our Plantein line continues to gain traction,” Ragogna noted.
Naturally Splendid said it has made a number of strategic decisions with the objective of prioritizing the exclusive Canadian manufacturing and distribution opportunity of Plantein Plant-Based Foods with Flexitarian Foods Pty. Ltd. Naturally Splendid has partnered with Flexitarian Foods in an exclusive 10-year year manufacturing and distribution agreement for Plantein and has also negotiated exclusive rights to the Plantein trademark for the same period. These exclusive agreements also have a 10-year renewal clause.
The company also said it has made strategic decisions in its existing operations, including regarding Prosnack Natural Foods which will only focus on manufacturing Plantein plant-based products under the Plantein brand, as well as for Private Label and Contract Manufacturing clients.
The company said it has identified three separate, yet complementary revenue streams generated from plant-based manufacturing:
- Plantein Brand - the company will seek to list Plantein branded products in both retail and foodservice outlets.
- Private Label - the company has access to over thirty plant-based entrees created by Flexitarian Foods that will create significant private label opportunities.
- Contract Manufacturing - In certain circumstances, Prosnack will manufacture for strategically selected contract manufacturing clients, producing their plant-based products in our facility.
Naturally Splendid said it will no longer defend the NATERA brand name since securing the Plantein trademark for Canada. The company is permitted to use the NATERA brand for certain bars and bites but will no longer seek the registered trademark.
The company reached an agreement with Biologic to terminate the contract with Plasm Pharmaceutical and is negotiating a compensation package for all work done so far for pursuing a potential treatment for Covid with the target drug Cavaltinib.
On Pawsitive FX, the company said for the time being operations remain as is focusing on online sales of pet topicals, with a further review looking to potentially sell this brand or consider other partnership-type scenarios.
The company noted that plant-based foods are growing more popular due to their environmental sustainability, scrutiny of animal farming and as people become more health aware. As the market for plant-based foods continues to grow, there is a tremendous opportunity for companies to provide products that meet consumer demand, it added.
First half financials
Looking at its financials, Naturally Splendid noted that its net loss narrowed to $1,316,236 during the six months ended June 30, 2022, down from a net loss of $1,403,685 in the same period a year earlier.
The company also said that its gross profit margins decreased by 2.6% of sales in the six months ended June 30, 2022, compared to the six months ended June 30, 2021. Administrative expenses for the six months ended June 30, 2022, decreased by $87,500 compared to 2021, primarily due to management & consulting fees, bank charges and legal fees.
Naturally Splendid recorded sales of $157,314 during the six months ended June 30, 2022, compared to $470,039 for the six months ended June 30, 2021.
Meanwhile, the cost of sales during the six months ended June 30, 2022, was $136,186 compared to $394,812 in 2021. The company's sales were from its new line of plant-based entrees, which maintain a higher gross margin.
The company said it continues to focus on its higher-margin products and new commercial opportunities with its plant-based entrees.
Contact the author at jon.hopkins@proactiveinvestors.com